Stocks fail to ride overseas news

Media Reporter

The sharemarket has started the week with a modest loss, failing to jump on the bandwagon of positive international news, as losses among banks outweighed gains in miners.

The benchmark S&P/ASX200 slipped 9.7 points, or 0.2 per cent, to 4573.5, while the broader All Ordinaries lost 7.1 points, or 0.2 per cent to 4588.

Among the sectors, gold miners fell 2.8 per cent, financials dropped 0.5 per cent and consumer staples were down 0.7 per cent. Telecommunications jumped 0.9 per cent and materials inched up 0.2 per cent.

‘‘We were expecting a little bit more of a pick-up especially since we saw some great gains coming through in Japan today,’’ said CommSec markets analyst Juliette Saly.

Nikkei rallies

Japan’s Nikkei index rose more than 1 per cent to eight-month highs after the election of the conservative Liberal Democratic Party, who support further monetary easing, over the weekend.

This caused the yen to weaken against both the US dollar and the Australian dollar, with the local currency fetching 88.7 yen in late trading. The dollar was also up against its American counterpart, trading at around $US1.0540.

Ms Saly said the market also failed to gain on the news of progress in ‘'fiscal cliff'’ talks between US President Barack Obama and House of Representatives speaker John Boehner.

Among other concessions, Mr Boehner has offered an increase in the tax rate for individuals making more than $US1 million a year in return for $US1 trillion in spending cuts on government benefit programs.

Democrats rejected the offer, but the fact that Republicans were willing to concede a higher tax rate for the rich showed that talks were moving forward.

Despite the strong performance of the miners in recent weeks, ANZ drastically cut its interest rates forecast for next year, citing weak growth in the mining sector, higher unemployment and the strong dollar as its reason behind the 100 basis point drop.

Miners extend rally

Locally, the major miners were up again, BHP added 0.8 per cent to $36.35, while rival Rio Tinto rose 0.8 per cent to $63.52.

Fortescue jumped 3.7 per cent to $4.47, as investors continued to reward the iron ore miner, who is seen to be making an effort to pay down its large debt.

‘‘[Fortescue’s] share price has been up about 15 per cent since the beginning of December, on the fact that its really trying to get its $6 billion debt burden down,’’ said Ms Saly.

Along with selling out its share in the Nullagine iron ore project for $190 million, the company said Monday, it would also sell a minority stake in its mining infrastructure assets, which include rails and ports. These assets have been valued between $US4 billion and $US6 billion.

Billabong finds interest

Shares in Billabong jumped after media reports that the president of the American arm of the company had offered $1.10 per share for the company.

Before entering a trading halt, shares in the surfwear retailer jumped 4.8 per cent to 98 cents.

All the big four banks posted losses, Westpac slipped 0.9 per cent to $25.75, ANZ dropped 0.6 per cent to$24.49, CBA fell 0.6 per cent to $61.29 and NAB lost 0.5 per cent to $24.48.